The drafting of shareholder agreements often involves extensive negotiations regarding governance mechanisms, exit clauses, and the financial rights of the parties. However, the issue of their duration is sometimes overlooked.
In a ruling published in the Bulletin on March 11, 2026, the Court of Cassation provided a major clarification: in the absence of an express term, a shareholders’ agreement is presumed to have been entered into for the remaining term of the company in question. The direct consequence is that it cannot be unilaterally terminated by either party.
This decision calls for greater vigilance when drafting extra-statutory agreements.
The case before the Court of Cassation concerned a shareholders’ agreement entered into in 1997 between the majority shareholder of a family-owned group and a minority investor.
The agreement provided that it would remain in force as long as the founding family retained majority control of the group. Several years later, certain partners considered that this provision did not establish a sufficiently precise term and believed they could unilaterally terminate the agreement by characterizing it as a contract of indefinite duration.
The Court of Appeal had ruled in their favor—but that was without counting on the Court of Cassation, which adopted a radically different analysis.
The Commercial Chamber ruled that a shareholders’ agreement lacking an express term must, unless there are contrary indications, be deemed to have been entered into for the remaining term of the company in which the parties are partners.
To reach this conclusion, the High Court relied in particular on the provisions of the Civil Code requiring that every company be incorporated for a fixed term.
Since the company’s duration is known and limited in time, the agreement that forms part of its operation may be regarded as concluded for a fixed term and not as a perpetual commitment.
The consequence is significant: the parties do not have the right to unilateral termination.
The solution adopted departs from the approach traditionally taken regarding agreements whose term was not clearly identifiable.
The Court of Cassation now establishes a genuine presumption: unless otherwise indicated, the term of the agreement follows that of the company.
This position strengthens the legal certainty of relations between partners and follows an obvious economic logic. Shareholder agreements frequently form the foundation of the balance that governed an investor’s entry or the organization of control over a company. Allowing one of the parties to unilaterally withdraw from such an agreement could have undermined these balances.
Through this ruling published in the Bulletin, the Court of Cassation establishes a principle of stability for shareholders’ agreements: in the absence of an express term, such agreements are presumed to be concluded for the remaining duration of the company and therefore cannot be terminated unilaterally.
This decision serves as a useful reminder of the importance of drafting duration clauses in extra-statutory agreements. For both partners and their legal counsel, it underscores the need to review existing agreements without delay to ensure that their duration provisions accurately reflect the parties’ original intent.